National Funding Review: Flexible Small Business Funding for Profitable Businesses

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National Funding Review: Flexible Small Business Funding for Profitable Businesses

We recommend National Funding’s small business loans for borrowers who have fair to average credit, operate profitable businesses and desire flexible lending.

Good for

  • Businesses that are likely to pay off their debts early.
  • Businesses that need to extend their loan terms.
  • Businesses that finance consecutive short-term loans.

Bad for

  • First-time borrowers seeking loan terms over one year.
  • Borrowers who wish to shop around.
  • Businesses with excellent credit scores.

Editor's Rating


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Customer Rating

4.7 out of 5.0 (35 reviews)

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National Funding is a good option for borrowers with seasonal cash flows, as the lender provides incentives for early payoffs while also providing the option to extend loan terms. The lender offers short-term business loans, working capital loans, and equipment financing. Borrowers who make all of their payments on time and keep their accounts in good standing can improve their loan terms with repeated borrowing. We focus our review on National Funding’s small business loan product based on information provided to us by the lender.

National Funding Review: Should you Apply?

If you run a profitable business that needs quick access to capital, National Funding is worth exploring. The interest rates provided to us by National Funding are lower than many alternative lenders in the industry. This lender offers unsecured short-term funding for profitable businesses, making them well-suited for short-term emergency funding needs. However, borrowers with good or excellent credit scores will likely obtain less expensive terms elsewhere, as alternative lending is still relatively expensive when compared to other business loans. Additionally, the weekly and daily payments common with short-term loans may be a burden for businesses that lack substantial cash flow.

  • Emphasizes business earnings over credit score.
  • Can improve loan terms with repeated borrowing.
  • Straightforward online application.
  • Terms and fees that lack transparency.
  • Difficult to obtain loans over 12 months as a first-time borrower.
  • Hard to gauge costs until you actually apply.

The Pros of National Funding

One of the major selling points of National Funding is that it rewards borrowers who pay off their loans early. Equipment financing customers who pay off their total balance early are entitled to a 6% discount off their last balance amount. In addition, borrowers who obtain a working capital loan and pay it off within the first 100 days of their contract will automatically receive a 7% discount off their total remaining balance. These amount to substantial discounts for borrowers who are able to take advantage of them.

National Funding advertises that its credit requirements are lenient in comparison to other lenders. This is because National Funding places more emphasis on your business's ability to repay its debts than its credit profile, which helps applicants with fair to average credit scores qualify for funding. As borrowers pay back their loans over time, they develop a repertoire with the lender that affords them more favorable options. Repeat borrowers in good standing can reduce the costs of future borrowing and are often approved for longer terms.

National Funding also allows loan extensions for first-time borrowers who pay off 50% of their loan balances and remain current on their accounts. Customers who establish a reputable payment history by paying off half their loan balance have the option of extending their loan terms. This is useful for responsible borrowers who need an extension but don't want to incur additional costs by refinancing or applying for new credit.

The Cons of National Funding

Borrowers browsing the lender's website will not find much information about specific loan rates. During our review, we found no way for borrowers to see their estimated loan terms without submitting an application. This makes the lender less than ideal for rate shopping.

Additionally, while the lender allows short-term loans for up to five years, the majority of first-time borrowers will be limited to one year. The weekly and daily repayment cycles on National Funding's loans can seem burdensome for some business owners. Borrowers who want longer terms have the option of extending their loan terms, but this flexibility comes with an added cost, as borrowers who choose to extend will incur greater interest expenses over the longer period.

National Funding offers unsecured business loans, which means that businesses will not need to place any specific assets at risk when obtaining funding. We caution that borrowers who intend to borrow more than $250,000 will be subject to a UCC-1 filing, which is a blanket lien over their business's assets. Finally, all loans will need to be personally guaranteed by the borrower, which renders business owners personally liable in the event their business is unable to repay its debts.

Final Thoughts

National Funding offers an easy short-term solution for fair-credit borrowers who need quick funding. Its relationship-based lending practices makes borrowing less expensive each time, but borrowers should use it sparingly, as short-term loans are still a relatively expensive source of financing. If you have a great credit profile and wish to shop around for the best rate, check with other lenders before using National Funding, as it's difficult to obtain an exact rate quote without applying for a loan. Borrowers who have immediate funding needs and are turned away elsewhere should check with National Funding, as the lender focuses on your ability to repay loans rather than your credit profile.

Eligibility Criteria

To qualify for funding with National Funding, you must meet the following criteria.

  • Minimum personal credit score: 600
  • Minimum annual revenue: $100,000
  • Minimum time in business: 12 months

National Funding does not accept collateral and is available to applicants in all 50 states and Washington, D.C. Borrowers must personally guarantee all loans and will be evaluated based on their business's monthly gross revenues.

National Funding will also check your personal credit score through a soft credit pull. UCC-1 filings are imposed for loan amounts above $250,000.

Features, Rates and Terms

We focus on National Funding's short-term business loans below.

Loan Amount Range$5,000 - $500,000
APR Range5.99% - 29.99%
  • Origination fee: 0-2%
  • No prepayment penalty
  • Early payoff discount
  • Automated ACH payments required
Financing Terms24 - 60 months
Repayment OptionsMonthly or weekly
Collateral RequiredUCC-1 filing (loans over $250,000)
Personal Guarantee RequiredYes

Approved borrowers will be required to set up automatic ACH transfers for loan repayments. National Funding conducts all of its lending operations electronically and does not accept checks or phone payments.

National Funding Application Process

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National Funding accepts applications online. If approved, borrowers should expect to receive funding within one business day, assuming they've submitted all the relevant documents. Loan Specialists are available Monday through Friday, between 6:30 a.m. and 4:30 p.m. Pacific time (9:30 a.m. to 7:30 p.m. Eastern time). National Funding is headquartered out of San Diego, California, and is available to applicants with access to a phone and internet connection in all 50 states and the District of Columbia.

Based on details provided by the lender, borrowers who wish to see their rates and terms will need to complete an application and consent to a soft pull on their credit.

Due to its lack of physical branch locations, the application must be completed online. Borrowers can access the application by hitting the "Apply Now" button on the National Funding home page. Be prepared to provide the following information.

  • Personal contact information and Social Security number
  • Business contact information
  • Time in business
  • Annual gross sales figures
  • Three months' worth of business bank statements

By the end of the online portion, you will be asked to upload three months' worth of business bank statements and consent to electronic disclosures. You will also need to verify your identity and your ability to consent on behalf of your business. The initial online process should take around 10 to 15 minutes.

Screenshot of National Funding Application Process
National Funding Business Loan Application

Once you've completed the online application, a National Funding Loan Specialist will call you to verify some details, if needed, and walk you through the remaining steps. If approved, the funds should be directly deposited into your business checking account within one business day, but it may take longer depending on your bank's policies.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.